Layoffs.fyi, an online crowdsourced layoffs tracker that is used by many as a source of information, showed a recent Q2 2022 spike in tech and startup layoffs. Companies like Booking.com and Uber have laid off thousands over the last month.
U.S. companies are not required by law to offer outplacement services–a service provided by the employer typically to help terminated or laid-off employees transition to new jobs— it is becoming a standard benefit in many industries. Some career thought leaders, such as Sandra Sucher, professor of management practice at Harvard Business School, have argued companies have an ethical obligation to help laid-off workers find new jobs.
Many companies view outplacement services as giving their employees a soft landing. They want to demonstrate that they care about their former employee’s well-being and success even after their paychecks cease.
Hiring a company specializing in outplacement can help extend your HR department’s reach and improve your public image. Want to know more about the benefits of using an outplacement service? Below, we’ve compiled the top 15 advantages of HR outplacement for small and mid-sized businesses.
Top 15 advantages of HR outplacement for small & mid-sized businesses
1. Downsize With Ease
Your employees could be “just a number” in a large outplacement firm. They could get assigned an underqualified “career coach” with a portfolio of several hundred other unemployed job seekers. Or they could be subjected to online modules without the personal touch.
Boutique outplacement firms like Briefcase Coach specialize in executive resume writing, LinkedIn profile creation, job search strategy, and interview prep. We are an intentionally small shop. We understand the ins and outs of layoffs and have the expertise to help your exiting employees make the transition with ease.
2. Improve Your External Image
Sites like Glassdoor and Indeed allow current and former employees to leave starred reviews for their employers. And did you know that over 55% of job applicants read employee reviews before accepting a position?
One of the most common reasons people leave negative reviews is disgruntlement. Former employees feel upset about losing their jobs. But in many cases, these workers are just upset about the manner in which you fired them.
Over one in three people who were terminated or laid off left at least one negative review of that former employer on a review site, social media, or with a personal or professional contact.PRweb.com
Hiring an outplacement service provider can improve your external image. Laid-off workers will feel empowered during their search for new jobs. And they’ll feel supported because you’re paying for them to use those services.
Supporting workers’ transition to new jobs doesn’t only improve your image with former employees. It also makes hiring a whole lot easier.
One bad rating isn’t so bad when you have hundreds of employee reviews. But when you only have a few employee reviews, a single negative one can make a big impact on applicants.
3. Improve Your Internal Image
Downsizing doesn’t just stir up uncertainty in departing workers. It can also make remaining employees feel anxious about their job stability.
Part of solving this problem is improving internal communication and having outplacement offerings can help. Always let remaining employees know that you offer free assistance to help them find new jobs if you must let them go.
Communicating this can help show workers you care and preserve their trust. Offering an outplacement service will boost employee morale and productivity by reducing anxiety about job loss.
Further, communicating your willingness to help departing employees find new jobs will reduce turnover. Some workers won’t wait around for the next round of layoffs. They’ll start searching for new jobs.
If they instead know that you’ll help them find a new job at no cost to them, employees are more likely to stick around. That way, you won’t lose critical talent and create more vacancies to fill.
4. Decrease Unemployment Costs
In the US, any business with employees must help pay for unemployment insurance through the unemployment tax. The exact amount you pay in unemployment taxes depends on a number of factors, including the following:
- The state your employees reside in due to wage bases
- Your industry, and especially your industry’s turnover rate
- Lookback period, which is determined by how many former workers have filed unemployment claims with your business and how long these former employees collected benefits
The unemployment payments your former employee receives comes from the unemployment taxes you pay. If you own a business in Alaska, New Jersey, or Pennsylvania, you’ll also have to directly contribute to your former employee’s unemployment payments.
What you may not know is that businesses with fewer unemployment claims can get better unemployment insurance rates. The number of workers who have filed claims against you is the No. 1 factor that tax assessors consider when determining your unemployment taxes.
Additionally, offering severance packages can help reduce your unemployment tax rate. Severance packages that include services to help former employees find a job are ideal. That’s because helping workers find new jobs will reduce the amount of time they collect unemployment.
5. Reduce Your Legal Risk
Wrongful termination suits are bad for businesses, especially small businesses. In one study, over 50% of workers who filed for wrongful termination earned a $5,000 to $40,000 settlement.
When employees feel disgruntled due to a firing, they’re more likely to want to file a lawsuit. Wrongful termination lawsuits are common, but so are workplace violence claims from disgruntled ex-employees.
But getting sued isn’t the only concern after a layoff gone wrong. You may end up being the one to sue if the angry employee defames your company.
Disgruntled former workers have many outlets to vent their frustrations these days. If their actions end up causing damage to your company, the only option may be to sue for defamation.
So, how do you reduce your company’s legal risk during mass firings? Providing outplacement options can help employees feel like you care. And if they believe you care about their wellbeing, they may feel less inclined to sue or defame your brand.
6. Impress Investors
It’s a well-known fact that employee churn and financial performance are correlated with one another. More specifically, the higher a company’s turnover rate, the more negative of an impact on your finances.
Further, a 2021 study found that increased turnover predicts negative future financial performance, too. The smaller or younger a firm is, the more employee turnover affects financial performance.
As mentioned, mishandling a mass layoff or even a few employee firings can increase turnover. Employees may feel anxious about getting laid off themselves, leading them to hunt for new jobs.
Your turnover rate may not be public. But people talk, and if investors are doing their due diligence properly, they will find out about the churn issues at your company.
Even if you aren’t trying to take your company public, high turnover is bad for your image. It may turn away potential investors, costing you thousands of dollars.
A simple solution is to reduce turnover using the promise of outplacement services. Then, even when employees do leave, you’ll also give prospective employees an incentive to fill their place.
7. Free Up Your HR Department
From hiring and firing to administering benefits and fostering culture, your Human Resources department has a lot on its plate.
If you’re like most small and mid-sized businesses, your HR department is small. You may not even have an HR employee yet if your company has fewer than 100 employees.
Laying off workers is a delicate business. To get it right, you must spend time and energy ensuring former employers are set up for future success.
Instead of expecting your HR employees to handle resume advice, referrals, and coaching themselves, you can hire an outplacement provider like Briefcase Coach to do the following:
- Individual career coaching
- Resume and LinkedIn help
- Mock interviews
- Career profiling
- Social media and SEO strategy coaching
- Professional bio help
Outpatient service providers can supplement your efforts, especially if your HR department isn’t big enough or doesn’t have the tools needed to pull off a layoff effectively.
8. Boutique Outplacement Firms Offer Customized Services
You might be tempted to go with the largest, most well-known company when you’re in the market for outplacement services. After all, your biggest competitors probably do.
However, if you’re a small business or mid-market firm, you might want to consider a smaller service provider like Briefcase Coach. Why? Because we can offer customized outplacement instead of a one-size-fits-all approach.
We exclusively work with executive-level employees who leave or that you let go from your company. You can tailor our outplacement packages to your budget and executives’ unique needs.
What’s more, outplacement firms don’t need size to be successful. We purposefully keep our staff size small because we only hire the best of the best in the industry.
And this strategy works, too. A significant portion of our clients frequently refer back their business, and we have more than 50 reviews from satisfied clients. Check out some of our success stories to see for yourself why we’re one of the nation’s top outplacement service providers.
9. Compete With Bigger Employers
It’s no secret that there’s a talent war going on right now. At the end of 2021, nearly 90% of employers reported that they expected hiring and recruiting to be a significant challenge in 2022.
Yet, at the same time, almost 70% of employers also expect to increase their workforces this year. Here are some of the tactics businesses are using to attract new talent:
- Salary and wage increases
- The move to hybrid work styles
- Increased job vacancy advertising efforts
You aren’t an enterprise, though, meaning you can’t always afford to pivot the same way big businesses can. So, another way to better compete for talent is to offer better benefits.
Severance packages are highly desirable among employees these days. With a potential recession looming, workers want to know that their jobs are safe. And if they do get laid off, they want to ensure they have somewhere to go next.
Offering outplacement benefits in your severance package can make your business look more competitive. And that could be the difference between you surviving the talent war or not.
10. Treat Your Employees Like Family
Is your relationship with your staff personal? Whether you’re a small or large business, feeling like your employees are family can be a major setback when you have to let someone go.
You see their faces every day at the office and probably know their families. In some cases, you may even know how negatively an executive could be impacted by getting fired.
When it’s time to lay off your employees, you may feel like you’re losing not only a worker but also a trusted friend. Therefore, it’s critical for you to offer these employees the support they need for a successful future.
Providing outplacement options can help you treat your employers like the family they are, even after they no longer work for you.
Another benefit of treating your employees like they’re family is loyalty. We’ve talked a lot about turnover in this guide, but that’s because it’s important to your company’s success.
When your team knows you respect them, they’ll feel more loyal to your brand. Loyal employees are less likely to leave, even in the face of a better offer. They’re also going to be evangelists for your brand.
11. Reduce Business Disruptions
Layoffs can cause a lot of chaos internally. And when you’re getting rid of a member of the executive team, this chaos can multiply. In fact, executive turnover is closely linked to overall business performance.
For example, a study of executive churn in public Chinese companies found that executive turnover leads to two major operational issues:
- Managerial entrenchment can occur, which means that executives make decisions to endear themselves to investors and shareholders instead of doing what’s best for the business
- Primary shareholders can take advantage of minority shareholders
Of course, even if your company isn’t public, executive churn can still lead to significant business disruption. We’ve already mentioned a big one: current employees may start to feel anxious about their job safety, leading to more turnover.
Executive churn can further impact productivity. When a major leader leaves or gets laid off, the company can lose direction. Without a strategic vision to rely on, employees may feel uncertain about the value of their work.
Hiring an outplacement provider can help with these issues. HR departments can spend more time looking for a replacement instead of setting up the former executive with a new job.
12. Outplacement Service Providers Can Be Affordable
Remember how we mentioned that going with the biggest outplacement service provider isn’t always the best option? Here’s another reason why that’s true: larger companies are often cost-prohibitive.
Bigger businesses have more employees to pay, more clients to take care of, and more administrative work on their hands. All of this means a higher price tag for their services, but not necessarily better services.
When you instead choose a smaller firm like Briefcase Coach, you can cut your outplacement services cost in half. We employ a smaller staff than the big guys, and many of our clients are repeats, meaning there’s less onboarding required.
The result is an affordable, flexible service that can work even for businesses on the tightest budgets.
13. Boutique Outplacement Firms Are Specially Designed for Smaller Layoffs
It’s a common misconception that outplacement services are only useful for big layoffs. The truth is that there are smaller outplacement service providers that specialize in niche segments.
For example, Briefcase Coach specializes in executive outplacement. We exclusively work with C-level, VP-level, and Director-level executives, as well as middle managers.
Our service is unique because we tailor our services to everyone we work with. That’s right: we don’t do group sessions. We provide one-on-one services for all our executive clients.
Why? Each executive is different in tenure, background, and career goals. We believe this specialized focus on the individual sets us apart from the competition and drives our clients’ success.
Our firm can promise this level of expertise because we only hire the best professionals. Each of our outplacement career coaches has an advanced degree and a long track record in the industry.
So, whether you need to lay off a group of workers or a select number of executives, there’s a provider out there for you.
14. Outplacement Service Providers Have the Best Networks
Many outplacement providers promise that they can get your former employees hired two times faster than if you didn’t use their services. This is often true because outplacement firms have incredible networks.
With Briefcase Coach, we can help your former employees get hired 20% faster. How do we do it? We have one of the largest job search networks in the world.
Now, you may be wondering: what exactly is a job search network? Job search networks are also known as job search clubs. These organizations bring together individuals who are on the hunt for a new position.
The club will hold networking events, where you can meet employers in your industry and area. At Briefcase Coach, we work with some of the best employers in the country, and we want your executive employees to meet them, too.
Many of the jobs clients in our network are hiring for aren’t posted on public job boards. Instead, they advertise these jobs directly to us, knowing we have the talent they need.
With our help, you won’t just set up your former executives with a good job; you’ll set them up with a better job. That way, your former employees will always speak highly of your brand to future colleagues.
15. Outplacement Firms Know How to Deal With Economic Downturn
With record-high inflation and a bearish market, many financial experts have predicted an oncoming recession. The World Bank recently released a statement saying it believes a recession is coming within the next year.
Recessions change the way you do business, and outplacement firms should change the way they work in recessions, too. Therefore, it’s critical to hire a firm that has experience placing executives during an economic downturn.
When you’re hunting for an outplacement service provider, you must consider the firm’s experience. Many recruiting and HR services firms will pop up during recessions. After all, they know there will be high demand for what they do.
But a good outplacement provider won’t just specialize in hiring. During recessions, many executives must make career pivots to find the pay and job security they need. When this happens, career coaching becomes essential.
Briefcase Coach offers career coaching and talent development for this very reason. We know how to help your former execs identify what they’re good at and notice where they need to reskill or upskill.
In other words, if you want your departing employees to survive the impending recession, you need to work with an outplacement service provider that does more than resume writing alone. You need Briefcase Coach.
Looking for Outplacement Services?
Outplacement service providers can help your company and employees stay on track after an executive is let go. Benefits include successful former employees, invested prospective hires, productive current employees, and happier investors.
Are you searching for executive outplacement services for your business? Briefcase Coach is a national leader in resume writing, job search coaching, and more. Contact us to find out all that we can offer you.